In Picazo v. Kimball, Tirey, & St. John, LLP, 2018 WL 1583228, at *5 (S.D.Cal., 2018), Judge Miller granted an Anti-SLAPP action filed by a debt collector in a Rosenthal Act claim arising from alleged misconduct in a state court UD action.  Judge Miller first found that the Rosenthal Act prevailed over the litigation privilege under the facts of the particular case.
KTS argues that the litigation privilege bars Plaintiffs’ Rosenthal Act claim. KTS asserts that although the litigation privilege does not apply where the Rosenthal Act is the more specific statute, here, there is no specific Rosenthal Act provision prohibiting the filing of an unlawful detainer action and seeking daily holdover damages. Plaintiffs argue that KTS falsely alleged a debt by claiming that Plaintiffs owed money for a past period of occupancy, thereby violating provisions of the FDCPA incorporated in the Rosenthal Act and creating a conflict between the Rosenthal Act and the litigation privilege. Furthermore, Plaintiffs argue that the litigation privilege does not apply because the Rosenthal Act is always the more specific statute.  KTS relies on two cases to support its argument. The first, Nickoloff v. Wolpoff & Abramson, LLP, 511 F. Supp. 2d 1043 (C.D. Cal. 2007), is a pre-Komarova case that concerned the sufficiency of documentary evidence connecting the chain of title of the debt—evidence that was provided during a legitimate arbitration proceeding. Because Nickoloff predates Komarova and is a case the court previously declined to follow in Sial v. Unifund CCR Partners, No. 08cv905 JM (CAB), 2008 WL 4079281, at *5 (S.D. Cal. Aug. 28, 2008) (finding that the Rosenthal Act prevails over the statutory litigation privilege), the court declines to follow it now. The second is Boon v. Prof’l Collection Consultants, 958 F. Supp. 2d 1129 (S.D. Cal. 2013), in which the court applied the litigation privilege to a Rosenthal Act claim premised on a time-barred state court action. The court respectfully opts not to follow the decision in Boon because, as the court noted in Petley v. San Diego Cty. Credit Union, 2017 WL 385742, at *5 (S.D. Cal. Jan. 27, 2017), the court cited only pre-Komarova district court cases. Furthermore, apart from Boon, only one other federal court decision since Komarova has applied the litigation privilege to Rosenthal Act claims. See Ordinario v. LVNV Funding, LLC, 2016 WL 852843, at *2 (S.D. Cal. Mar. 4, 2016). All other cases have rejected that approach. See, e.g., Welker v. Law Office of Daniel J. Horwitz, 699 F. Supp. 2d 1164, 1174 (S.D. Cal. 2010) (Gonzalez, J.); Huy Thanh Vo v. Nelson & Kennard, 931 F. Supp. 2d 1080, 1097 (E.D. Cal. 2013) (noting in 2013 that following Komarova, “not a single federal court has found Rosenthal Act claims to be barred by the litigation privilege”); Holmes v. Elec. Document Processing, Inc., 966 F. Supp. 2d 925, 937 (N.D. Cal. 2013); Derr v. Kimball, Tirey & St. John LLP, 2012 WL 12874923, at *3 (S.D. Cal. Aug. 14, 2012) (“Applying the litigation privilege would…eviscerate the Rosenthal Act.”).  Given this weight of recent authority, the California Court of Appeal’s opinions in Komarova and Persolve, and this court’s own decisions in Sial and Petley, the court holds that the litigation privilege and the Rosenthal Act conflict in this case and, consequently, the Rosenthal Act must prevail.
Judge Miller found, however, that rent, which was the subject of the UD action, was not a “consumer credit transaction” under the Rosenthal Act.  Hence, the debt collector was not a “debt collector”.
Even if KTS sought unpaid rent in the unlawful detainer action, Plaintiffs still could not prevail on their Rosenthal Act claims because “residential rent collection is not a consumer credit transaction protected under the Rosenthal Act.” Phillips v. Archstone Simi Valley LLC, 2016 WL 7444550, at *5 (C.D. Cal. Dec. 15, 2016). Residential tenancies that require monthly rent paid in advance do not involve any extension of credit by the landlord. “Renting an apartment is not truly a credit transaction” because the landlord “neither sells property on time nor makes funds available to tenants.” Ortiz v. Lyon Mgmt. Grp., Inc., 157 Cal. App. 4th 604, 619 (2007). Because Plaintiffs did not acquire their leasehold on credit, no consumer credit transaction occurred between Plaintiffs and CFSD, and the rent paid by Plaintiffs is not a consumer debt under the Rosenthal Act. See Leasure v. Willmark Communities, Inc., 2013 WL 6097944, at *4 (S.D. Cal. Mar. 14, 2013) (concluding that residential rent collection does not qualify as a consumer credit transaction). The cases cited by Plaintiffs to support a different result are inapposite. See Phillips, 2016 WL 7444550, at *4–6 (explaining why Gouskos v. Aptos Village Garage, Inc., 94 Cal. App. 4th 754 (2001) and Koller v. West Bay Acquisitions, LLC, No. C 12-00117 CRB, 2012 WL 2862440 (N.D. Cal. July 11, 2012), which dealt with car repairs and monthly video rentals, respectively, are not analogous to the landlord-tenant relationship).  In an effort to avoid this outcome, Plaintiffs argue that this particular lease with CFSD was acquired on credit, making it a consumer credit transaction. (Doc. No. 13 at 23.) Plaintiffs spend a significant portion of their opposition brief going through CFSD’s history with the property in question. When CFSD obtained a loan from the Commission to purchase the property, one of the conditions of the contract required CFSD to offer residential leases to low income individuals for a period of fifty-five years. (Doc. No. 13 at 8.) These leases, subject to the HOME Program, must be renewed absent good cause for termination, which does not include an increase in a tenant’s income. 24 C.F.R. 92.253(c). According to Plaintiffs, this situation gives Picazo a property interest until 2052, and because “she does not pay for the right to force CFSD to renew her lease all the way through to 2052 absent good cause,” the lease is property that Plaintiffs obtained on credit. (Doc. No. 13 at 25.) In short, Plaintiffs attempt to extend the 1997 credit transaction between CFSD and the Commission to Plaintiffs, arguing that that “[i]f the lease is a consumer transaction, then the rent that may be alleged due in connection with that lease is a consumer debt because it is owed by reason of the lease.” (Doc. No. 13 at 30.) Plaintiffs fail to provide any legal support for that assertion.  The court is not convinced. Although Plaintiffs’ lease is subject to the HOME Program and cannot be terminated based on Plaintiffs’ income, it is still a month-to-month tenancy that requires rent in advance. Thus, no credit is extended to Plaintiffs. While CFSD may owe a debt to the Commission for the loan it received in 1997, Plaintiffs do not owe anything apart from their monthly rent for the right to renew their lease absent good cause to terminate it.  Therefore, Plaintiffs have failed to establish that there is a probability that they will prevail on their Rosenthal Act claims because the unlawful detainer action was not an attempt to collect a “consumer debt” as defined by the Rosenthal Act. Accordingly, the court grants KTS’s anti-SLAPP motion to strike and dismisses Plaintiffs’ Rosenthal Act claims.